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Know When to Walk Away

Campbell Soup’s Emily Waldorf, one of the executives on T&R’s 2012 Under 40 list, says it’s important to learn when to say no to an M&A transaction.

Since joining Campbell Soup just a year ago as director of corporate development, Emily Waldorf has already worked on the $7.7 billion company’s largest deal ever, the $1.5 billion purchase of Bolthouse Farms, a $689 million provider of fresh carrots, beverages and dressings.

During the deal process, Waldorf led the due diligence and valuation efforts and oversaw the complicated project as a whole, ensuring that the acquisition was a good one for shareholders. She always remained ready to say no, she recalls.

“One of the things I was challenged with in the Bolthouse deal, and in every deal, was learning when to walk away, and being able to say no,” Waldorf says. “I think it’s one of the hardest things in M&A, knowing when to say no, when to walk away and when the value is destructive. There were multiple times throughout this process, like every other, where we needed to make sure going forward was the right decision. Fortunately, we were able to get the deal done before we got to that point. You need to know when any given deal doesn’t make sense. We were lucky to not be tested, and have to say no.”

Waldorf, 35, began her career at AT&T and has also worked for Discovery Communications, Johnson & Johnson and the FBI. In addition to her work on the Bolthouse deal, Waldorf led Campbell’s recent divestiture of its agricultural seeds business.

How did you get into finance? I’ve always loved numbers. I started out in math in college, but the job opportunities weren’t exactly what I wanted to do. So a counselor advised me to consider finance, and I decided to try it out. I loved it right away. My first job out of school was in the financial leadership program for AT&T, and one of my rotations was in the M&A group. I fell in love with the fast pace and the strategic view, the project orientation that doing deals allows me to do. I was fortunate to have the opportunity to make a career out of that.

You also worked for the Federal Bureau of Investigation at one time. Tell me about that.The Special Advisor Program in the FBI was a program designed to bring M.B.A. grads into the FBI, particularly those with experience working in the private sector prior to business school. The purpose of the program was to help the FBI apply those private sector learnings to the government in order to make it more efficient and less reliant on external advisers.

I really wanted to learn more about project management and strategy and to really be able to apply those when I came back to corporate development, because, obviously, strategic thinking and project management are what corporate development is all about. It’s really about getting those cross-functional people together and having that single objective.

What was involved in the Bolthouse Farms transaction? The really complicating factor around Bolthouse Farms was the complexity of the different businesses that it owned. It had the carrot business as well as the premium juice business and some other smaller businesses. So the due diligence efforts related to this transaction were quite complex. We had 20 different workstreams going on at any given time, and over 70 different stakeholders. My role was focused on working with the banks and outside advisers, as well as our internal folks, to coordinate diligence, and really manage the project. I worked on and led the valuation efforts as well.

It was a very exciting deal for us. What was interesting and different about it was that the strategic rationale was just so clear. Campbell Soup really wanted to get into the perimeter of the store, where the consumer trends were leading us, and Bolthouse was one of the few and the strongest brands in the perimeter of the store, and really leads the packaged fresh space. It was exciting to be able to execute on such a strong strategic vision for the company.

Does the “perimeter of the store” mean fresh instead of canned?That’s right. Packaged fresh to us means anything with a value-added component that’s sold in a fresh format, so things like salad dressings and juices that are fresh and refrigerated. To us it really meant getting into things like fresh and refrigerated soups, dips and spreads. Things that are not necessarily on the shelves today, but where we see a strong vision in consumer need. Bolthouse provided the basis for us to get in there.

What was the most challenging aspect of the deal? What did you learn? What was really challenging about this deal was that we were up against some pretty intense private equity bidders. They had convinced the seller that they could move very quickly. Being a corporate, we had a reputation, like all other corporates, that we would not be able to move quickly. So what was challenging but also extremely rewarding was that the team really came together at the ninth hour and was able to negotiate and sign the deal within a few days' time. So it showed our speed and agility.

What is the most challenging part of your job overall? Being able to say no and walk away when a deal gets tough. At Campbell’s, we’ve had a few instances in particular where some of the valuation and multiples being paid in the industry were unacceptable to shareholders and didn’t lock in a fair enough return and we’ve had to walk away. So that’s always challenging.

Another aspect more generally is needing to work with people in all different areas of the business. It’s challenging, but it’s also the best part of my job, that you get to dig into these complex issues and work with people from all around the business.

What’s the most important lesson you’ve learned in the course of your career? One of the things is that has really helped my career, and other people could potentially learn from, is to not be afraid to take on all different kinds of projects, including those that may not seem as glamorous as others. A lot of my success to date has been because I was the first person to raise my hand for some of those projects, and it’s really helped me to grow and be a team player.

Can you give me an example? Since I started at Campbell’s, I worked on a small divestiture. Divestitures are of course always difficult strategic decisions to make. And it’s not a glamorous project, because it’s not $1.55 billion, it’s not the largest transaction the company is going to do. And you might not be the favorite person at the end of the day. However, you get to work with all kinds of different people. You get to really know a business, dig into it, and you get to know the buyer.

Strategic rationale is a big thing for me; I don’t like deals that are purely financial. I think it’s extremely important for any deal to have a strong strategic rationale. A lot of times these small divestitures make a lot of sense from a shareholder-return perspective but aren’t always the most glamorous. I think they’re the ones where you get to learn a lot, and you have more flexibility in shaping your role.

Have you had mentors? I’ve had lots of mentors along the way, both formal and informal. They’ve played a large role in my success to date, but I also believe everyone is responsible for their own career development, so I like to seek out and find mentors who can help in the areas that I have challenges with at any given point in time. When I started at Campbell’s, I wanted to work on networking, so I sought out someone I thought was really good at networking, and developed an informal mentoring relationship with that person. But I like the flexibility of also having other people as sounding boards, to keep me grounded in my projects and also to provide a different perspective on operations and strategy. Having a network of mentors is extremely important.

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